Consumer sentiment improved in Jun
as higher stock prices & an improving labor market helped
bolster Americans' views of the economy. The Thomson Reuters/University of Michigan’s final
sentiment index climbed to 82.5 from 81.9 in May. The forecast called for an increase to 82 after a
preliminary reading of 81.2. More employment opportunities, record stock prices &
improved property values are giving consumers cause for
enthusiastic attitudes, reducing the odds that consumers will
retrench. At the same time, Americans are paying more at gas
pumps & grocery-store checkout lines, underscoring the need
for bigger wage gains. The Michigan sentiment survey’s index of current conditions, which measures Americans’ views of their personal
finances, increased to 96.6 this month from 94.5 in May. The
preliminary reading was 95.4. The gauge of expectations 6 months from now was little
changed at 73.5 after 73.7 the prior month. The initial reading
was 72.2 for Jun.

Employment at companies climbed in Jun by the most since Nov
2012, a sign the job market is strengthening along with demand. The 281K surge exceeded
the most optimistic forecast & followed a
179K increase in May, according to the ADP Research Institute. The estimate called for a 205K advance. Businesses
are taking on more workers & limiting dismissals, bolstering
projections that the economy will strengthen after a
Q1. Companies
employing 500 or more workers added 49K jobs. Medium-sized
businesses, with 50-499 employees, took on 115K workers & small
companies increased payrolls 117K, the most since Feb 2012. Tomorrow’s
data from the Labor Dept may also show overall payrolls, which include gov agencies,
rose 215K workers in Jun after climbing 217K the prior
month & the unemployment rate probably held at an almost 6-year low of 6.3%.

Separatist rebels in eastern Ukraine continued to violate a truce extended today by the country’s gov after the EU gave Russia 3 days to stop the insurgency or face deeper sanctions. EU leaders demanded that the separatists, whom Ukraine and its allies say are backed by pres Putin's
gov, release hostages & start talks to implement a peace plan
drawn up by Ukrainian pres Poroshenko by Jun 30. While rebel
leaders agreed to the extension yesterday, the Defense Ministry in Kiev said they continued to fire on Ukrainian gov positions overnight. “Despite
peace initiatives by Ukraine’s leadership and a unilateral cease-fire,
the situation in the Eastern regions continues to escalate,” the
ministry said. “Insurgents are ignoring the peace plan to
ease the situation in Ukraine’s east and keep attacking troops.” The EU leaders said that failure to meet their demands will result in
“further significant restrictive measures” against Russia. “If
no visible progress is made on these points, then we are prepared to
take further decisions, including drastic measures,” German Chancellor Merkel said. “We expect progress to come really in the hours ahead.” The US also blames Putin for supporting rebels & stoking violence that has killed more than 400 in the country of more than 40M. The US is preparing sanctions against Russia on technology
aimed at exploiting & producing oil & gas products, a major part of
that country’s economy. While
the separatists are intent on controlling the territory they’ve seized,
the US was pushing Ukraine into conflict with Russia, Russian Foreign
Minister Lavrov said, adding that Putin seemed to be trying to ease tensions & said
the gov in Kiev must consult with the regions on devolving power.

Stocks are back to meandering afters yesterday's advance which lacked conviction. Favorable jobs numbers tomorrow are already baked into the market. Economic data which s encouraging is being tempered by the messes in Ukraine & Iraq which can end a market rally very quickly.